Sojitz (2768) Q1 2025 earnings summary

Executive summary

• Q1 profit rose to ¥23.0 billion, up ¥0.9 billion year-over-year, achieving 21% of the full-year forecast, with core operating cash flow at ¥41.7 billion, 32% of forecast.

• Revenue increased by 12.2% to ¥623.8 billion, driven by acquisitions in Retail & Consumer Service and Automotive divisions.

• Gross profit reached ¥84.9 billion, up ¥12.2 billion year-over-year, with notable gains in Retail & Consumer Service and Aerospace, Transportation & Infrastructure.

• Segment progress varied, with Chemicals and Consumer Industry & Agriculture leading growth, while Automotive and Metals, Mineral Resources & Recycling underperformed.

• Overall performance was in line with expectations, with some segments outperforming and others lagging.

Financial highlights

• Revenue: ¥623.8 billion (+¥67.8 billion year-over-year); Gross profit: ¥84.9 billion (+¥12.2 billion); Net income: ¥23.0 billion (+¥0.9 billion).

• SG&A expenses increased by ¥9.5 billion to ¥65.0 billion, mainly due to new subsidiaries and FX effects.

• Core operating cash flow was ¥41.7 billion (+¥6.5 billion); free cash flow was a net outflow of ¥43.5 billion due to increased investing activities.

• Total assets reached ¥3,075.8 billion, up ¥188.9 billion from March 2024.

• Basic EPS was ¥106.08, up from ¥96.86 in the prior year.

Outlook and guidance

• Full-year profit forecast maintained at ¥110.0 billion, up 9.2% year-over-year, with Q1 progress at 21%.

• Annual dividend forecast is ¥150 per share, a 29.6% payout ratio.

• Energy Solutions and Healthcare expected to be H2-weighted; Automotive and Vietnam retail recovery require close monitoring.

• Withdrawal from the Philippines automotive sales business planned by year-end to stop losses.

• Assumes a yen/dollar rate of ¥140/US$ for FY2025.